INTERNATIONALE TRAVERTINE S.R.L. v. PHAILBUL SOMBAT MARBLE CO LTD.

1989, No. A533

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. The Plaintiff is an Italian Company which supplies marble and granite. The Defendant is a company importing such materials and arranging for its installation in building projects.

2. The Plaintiff's claim is a simple one. It is based upon the supply of materials to the Defendants which were used for the Palace Hotel in Peking. The invoices for the materials were dated between the 27th July and the 19th September 1988. During the course of the 12 day trial before me the Defendants acknowledged that these invoices were payable. Indeed they agreed that as at the 13th June the total amount payable including interest amounted to US$282,055.38.

3. However, the real dispute between the parties was whether the Defendants were entitled to a set off of this claim. By their re-amended Defence and coutnerclaim the Defendants claimed damages for HK$648,527.70 and a Declaration that the Plaintiffs should indemnify them for moneys which were deducted by Hip Hing Construction Co. Ltd. in a final account struck between the Defendants and Hip Hing in relation to construction on the Parkview Project.

4. The Defendant claimed that Hip Hing had deducted $265,500.00 from the moneys due to them and that this deduction was made as a result of the Plaintiff's breaches of contract to supply them with Botticino Semiclassico Marble of a merchantable quality and deliver it in accordance with the contract between the parties.

5. There had been litigation between the Defendant and Hip Hing and I will be referring to this later in this Judgment.

6. The main witnesses giving evidence before me were Mr. Rossi who represented the Plaintiff and Mr. Tabar who represented the Defendant.

7. Mr. Rossi agreed that his company had been interested to supply marble to the Defendant and that large quantities of marble were needed for the Parkview project. He had had a number of meetings with Mr Tabar and was familiar in general terms with the quantities of marble required by the Defendant and in approximate terms when it had to be installed at the site. However what he did not know was how much marble would be supplied by the Plaintiffs. He did of course appreciate that he had to obtain orders from Mr. Tabar and there was no guarantee that his company would obtain the orders.

8. On the 16th May 1988 Mr. Rossi received a telex from Mr. Tabar in these terms:

"16th May 1988

TO: INTERNATIONAL TRAVERTINE

ATT:MR BRUNO ROSSI

RE: PARKVIEW

WE ARE READY TO OPEN L/C FOR MATERIALS FOR THE ABOVE PROJECT AND NEED TO HAVE YOUR PRICES FOR THE FOLLOWING:

1. CREMO DELICATO, SIZE 610X305X15MM

2. BOTTICINO CLASSICO, SIZE 610X305X15MM

3. CREMO DELICATO VANITY TOP, 3CM THICK.

4. BOTTICINO CLASSICO VANITY TOP, 3CM THICK.

YOUR IMMEDIATE REPLY WILL BE APPRECIATED AS WE WOULD NEED TO HAVE ALL MATERIALS ARRIVED HK BY THE END OF JULY.

ARE YOU DOING THE SHOP DRAWINGS FOR THE MAIN ENTRANCE GRANTIE CLADDING IN LUNA PEARL. THIS IS A MATTER OF EXTREME URGENT. PLS ADVISE."

9. He replied to this on the same day as follows:-

"RE YR TLX DD 16.5.88 PARK VIEW

AS FM YR REQUEST. WE ARE SUBMITTING YOU PRICES FOR WHAT YOU REQUESTED:

1. CREMO DELICATO 610x305x20MM =                USD 50.00/M2

2. BOTTICINO CLASSICO 610X305X15MM =         USD 27.00/M2

3. CREMO DELICATO VANITY TOP 3CM THK = USD123.00/M2

4. BOTTICINO CLASSICO VANITY TOP 3CM THK = USD 71.00/M2

PLEASE WE NEED EXACT QUANTITIES TO RESPECT THE DELIVERY DATES YOU REQUEST

CONCERNING THE SHOP DRAWINGS FOR MAIN ENTRACE GRANTIE CLADDING IN LUNA PEARL AS ALREADY TOLD BY PHONE TO MR TABAR AND ALSO AS COMMUNICATED BY LETTER TO DO WHAT YOU ASK WE NEED ALL PLANTS AS WITHOUT THEM WE ARE NOT ABLE TO GET EXACT QUANTITY. IF THERE ARE CURVED SECTION CORNERS ECT."

10. There was then discussion of the matter over the telephone. Mr. Tabar complained that the price of US$27 per square meter for the Botticino Classico was too high. After discussion, it was agreed that Botticino Semiclassico marble would suffice and a price of US$21 was agreed. It is common ground between the parties that semiclassico marble is of an inferior quality to classico marble. In any event Mr. Rossi delivered a proforma invoice to the defendant on the 23rd May. It is significant to note that no delivery date is given on this proforma invoice.

11. In this connection it may be helpful to consider the constraints which existed on the subject of time. Mr. Rossi gave evidence concerning the amount of time each stage in the process from quarrying the marble to landing it in Hong Kong in tiles would take I have no doubt that if his evidence is to be accepted it would have been abundantly clear to both parties that there could be no question of 8500 square metres of Botticino semiclassico marble being delivered in Hong Kong before early August on the basis of a letter of credit being opened by the Defendant at the end of May. However Mr. Rossi gave evidence that the requirements of the letter of credit provided for partial shipments and he intended to ship as much of the marble as possible during the currency of the letter of credit which was opened. The final date for shipment was the 10th of July and the expiry date was the 20th July.

12. It soon became apparent that formidable difficulties would be encountered in obtaining sufficient quantities of the required marble.

13. Mr Rossi claimed to have kept Mr Tabar advised of the situation. In particular, reference was made to a passage in a telex from him to the Defendant dated the 16th June:-

"sq. mt. 8,500 Botticino in sizes 610 x 305 x 15 mm. Here start the problems and I assure you that they are very big. At the moment I managed to place:

Sq. mt. 5,500 of Botticino - sq. mt. 2,000 of Perlato Sicilia, but I wait for either you or your client's approval to start.

For settlement, I really don't know what to do as everybody are fully engaged. Anyway, I have a man in Brescia and Verona who is trying to complete the order. I will keep you informed.

Anyhow, please postpone the shipping date up to 30.7.88 for this 1/c as well. At the moment, this is the order with more problems. I hope that tomorrow things will get better, but please inform your client that the situation is very bad."

14. His proposal to substitute different marble for the Botticino marble was considered by Mr Tabar and subsequently rejected. He continued to use his best endeavours to obtain further Botticino semiclassico marble and obtain further extensions to the time stipulated in the letter of credit. He managed to get the time extended up to the 20th August.

15. It would appear that matters came to a head on the 8th August. Mr Rossi said that on that day he had a telephone conversation with Mr Tabar. According to Mr Rossi he outlined the action he had taken to date and the problems which existed in obtaining further supplies. As at that date he had shipped 4394 square meters of marble under the Letter of Credit leaving a balance of 4106 square metres.

16. He said that Mr Tabar accepted the position and told him not to ship any more marble. He - Mr Tabar - would sort out the position concerning the balance.

On the next day, the 9th August he sent a fax to the Defendant. Paragraph 3 reads as follows :-

"BOTTICINO SEMICLASSICO                          ORDER SETTLED

INVOICE NO. 189/88

                        UNDER L/C 030880413NA

MATERIAL LOADED:

TILES 610X305X15MM                                            SQ.MT. 2387,88

CNTRS NO. 205818/1 - CONU 352259/4 - IKSU 901946/8 + 2

MORE CNTRS 1EAU 245487/6

VANITY TOP 3CM THICK                                     SQ.MT. 208,32

CNTRS NO. ITLU 617095/6

VESSEL NAME: 'SCANDUTCH EDO' DEPARTURE DATE: 15/8 ETA 7/9

N.B. YR ORDER WAS FOR TILES 610x305x15MM SQ.MT.  8500

TOTAL QUANTITY PREPARED                              SQ.MT.  4394

                         BALANCE                         SQ.MT.   4106

WE STOPPED THE PRODUCTION AS PER INSTRUCTION OF MR K TABAR."

17. Mr Rossi said that he never received any reply from Mr Tabar rejecting or taking issue on the final sentence in this extract.

18. He did however receive a fax from Mr. Tabar on the 25th August in this form.

"Fax Ref. No. GEN/8201/88 dd 25.8.88

Dear Bruno Good Morning,

Ref: Please be advised that the missing quantity of marble from the order I passed you. I had to buy it here in Hong Kong.

Naturally I had to pay a price higher than the one quoted by you. It is for this reason that in occasion of your next visit to Hong Kong we will make some calculations and we will try to help each other.

Regards,

Tabar"

19. This fax did not particularly disquiet him as he had planned to go to Hong Kong in early September when the whole situation could be sorted out. This indeed was the case.

20. He met Mr Tabar on the 9th September and accounts were struck between the plaintiff and the Defendant.

21. The statement of account which was agreed was as follows:-

" PHAIBUL SOMBAT MARBLE CO. LTD.

TO: Mr Bruno Rossi International Travertine

Statement of Account:

Your invoice no. 199/88                                          LIT19.206.660

Less: Price claimed per your inv. 172/88                           3,600.000

15,606.660

                                                                              =USD11,280.56

Add: Your payment to Levigrans                                      47,550.00

Less:Our Debit Note no. 085 & 086                                  (4,997.43)

                                                                        USD53,833.13

                                                                                                ===========

Payment:

HKD69,000.00 = USD8,846.15

Bal                           44,986.98

  USD53,833.13

===========

                                Signed K.Tabar

Suite 1507, Two Exchange Square

8 Connaught Place, Central, Hong Kong

Telephone 5-217115/6

Telex:84064 PASOM HX

Fax 5-8105307

22. Mr Rossi was emphatic that at no time during the meeting had Mr Tabar suggested that the quality of the marble supplied been in any way defective and it was his clear understanding of the position that the whole situation had been resolved by the settling of the accounts.

23. This impression was also reinforced by the fact that on the 24th October 1988 he was asked by Mr Tabar to provide a quotation for marble to be supplied to another project which Mr Tabar was involved in.

24. It did however become evident that Mr Tabar was tardy in effecting payment upon other invoices which he had tendered to him. In addition to this the cheque which Mr Tabar had given him on the 9th September for US$44,986.98 had been dishonoured by the Bank.

25. Mr Rossi said that he telephoned Mr Tabar almost daily pressing him for the payment of the money which was due to his company. Also he wrote a number of letters. It may be helpful to refer to some of these letters and the replies to them to obtain a flavour of the tenor of correspondence.

"To: International Travertine SRL Ref. No:J010/8314/88

Attn: Mr Bruno Rossi

Date:27th October 1988

Dear Bruno

Palace Hotel Project

Thank you for your quotation sent to me.

First of all, I would like to bring to your attention that today I have paid by telegraphic transfer to your accounts:

LIT47.730.400 + USD7,626.29 + USD31,372.50 With regards to all other invoices, these will be paid everyday upon receipt of payments from my customers and I shall cover all payments within the next ten (10) days.

Referring to my order for Travertine Classical, 4 full containers, is it possible to ship out the goods by 15-11-1988? Please advise soonest possible.

For your information I am leaving for Australia tonight and I shall be back in my office next Monday evening (31-10-1988).

With best regards

K. Tabar

TRANSLATION OF FAX FROM INTERNATIONAL TRAVERTINE TO PHAIBUL SOMBAT MARBLE CO LTD RECEIVED 09.11.88

Dear Kamy,

I'm really sorry that the watch doesn't work very well anymore.

Forgive me if I still bother you with this fax, but be sure this will be the last time.

I mistakenly thought of our possible mutual friendship, but it seems that I was really wrong. Anynow, I am grateful that you made me realize it soon.

Now I will start following the business point of view, exactly as you are doing (from your point of view).

If you think of myself, Bruno Rossi as an idiot or a stupid I suggest you to change your mind as soon as possible before you'll have some bitter suprises.

It is not my practice to travel and work around the world allowing people to rip me off as you are trying to do.

Therefore, if the company Phaibul Sombat Marble Ltd. will not see to the payment of the outstanding invoices from the company International Travertine S.R.L., within and not beyond the month of November 1988. I will see of other means and ways in order to obtain my due.

Regards.

BRUNO ROSSI

INTERNATIONAL TRAVERTINE S.R.L.

TRANSLATION OF FAX SENT TO INTERNATIONAL TRAVERTINE

FROM PHAIBUL SOMBAT MARBLE CO. LTD.

DATED 22ND NOVEMBER 1988

Fax Ref. No. GEN/8355/88 DD 22.11.88

Dear Bruno Good Morning

Please excuse me for my delay in payments.

These are the reasons:

1st:    I was out and just came back to Hong Kong since 2 days.

2nd:    Park View, they are not paying even one cent since 2 months.

3rd:    Bank for several reasons didn't follow my instructions.

Anyway, be sure that within and not over this week. I will face my engagments.

Best regards.

Kammy Tabar"

26. The first that Mr Rossi knew about allegations of defects in the marble was the fax he received from Mr Tabar dated the 22nd December 1988 in these terms:-

"To: International Travertine Italy

Attn.: Mr. Bruno Rossi Date: 22.12.1988

Dear Sir,

Further to our fax of today's date referring to the Botticino Classico shipped for the Parkview project we have been requested by the architects of this project to dismantle and replace all the Botticino Classico that presents with large spots of white, those with holes and cracks and yellow stains. At this stage we would appreciate to know from you how to resolve this major problem.

For your information, at this point in time, the contractors Hip Hing hold us responsible for the delay of the project and liability problems and has been putting a stop of all payments to our company. We would appreciate to know from you when can you come to Hong Kong to see for yourself how to find a solution to handle this urgent and major problem.

With best regards.

Merry Christmas and Happy New Year.

K. Tabar

President"

27. It was shortly after receiving this letter that the present action was commenced.

28. The only other evidence called by the Plaintiff was the Expert evidence of Mr. Zauzanaiai who is the General Manager of the Fabrications Division of Swire Duro Ltd. a Hong Kong Company.

29. He adopted the evidence contained in his Expert report.

30. In the report he made some general observations on Botticinco Classico and semiclassico marble and referred to the photographs appearing on the survey uncertaken by Binnie Consultants Ltd. in September 1988. In so far as it was possible to do so from the photographs he expressed the view that the marble depicted in the photographs conformed to the description of Botticino Semiclassico marble.

31. The Plaintiff did not call any other witnesses. Very understandably having regard to the fact that this is a construction dispute and the plaintiff had no presence on the site when the marble was installed their main strategy was to subject the evidence of the Defendant to critical scrutiny.

32. As I have said Mr Tabar was the main witness for the defendant. He has extensive experience of the marble and granite business over a lengthy period of time. Indeed he spent 18 years in Italy in the marble business.

33. He first became involved in the Parkview project in 1986. It was a very large project and included within the specifications of the scheme provision for the supply and installation of a great deal of marble. There was an awareness of the project amongst all major suppliers of marble.

34. There was also a desire on the part of a number of suppliers to supply marble for the project. Mr Rossi had first approached him in 1987. He appeared to be anxious to do business with him.

35. Mr Tabar had not at first been particularly keen to do business with Mr Rossi as up to that time he had mainly received exclusive supplies from one supplier. He did however permit Mr Rossi to make a number of quotations to him for different types of marble.

36. After discussion it had been agreed that Mr Rossi would provide price quotations for marble supplied by the plaintiff's own quarries. However where other marble was required Mr Rossi would seek it out and quote the supplier's price and add 10% as commission on marble and 8% on granite.

37. This mark up would cover the Plaintiff providing the service of selecting the marble, inspecting it and organising its shipment to the Defendant. Mr Tabar did however agree with a question I put to him that his main concern would be the price quoted for the marble being offered.

38. During the course of his evidence Mr Tabar alleged that it was evident from the prices being asked for the Bottocino semiclassico marble that Mr Rossi had obtained a secret profit. Mr Tabar was taken through the various documents and calculations were made on the price of the marble based on the exchange rate of the Italian lira to the U.S. dollar at the relevant time. It became clear that when due allowance was made for the approximate cost of freight from the quarry to the port of shipment the price of US$21 for the marble which had been supplied by Mr Rossi's supplier was fully justified on the formula described by Mr Tabar.

39. What is however evident to me is that the way in which this litigation is framed is that a claim is made for goods supplied and delivered. It is not a claim for services rendered. It is important to bear this in mind. While it is true that undoubtedly Mr Rossi did arrange for the marble to be selected and inspected by his staff the basis of the transaction between the parties was for the supply of the marble referred to.

40. It was Mr Tabar's contention that Mr Rossi spent a great deal of time with him in connection with the Parkview project. Indeed he had worked in an office at the Defendant's place of business. This being the case Mr Rossi had been fully aware of the detailed contractual requirements which the Defendant would have to comply with. This was particularly the case so far as deadlines were concerned for the installation of the marble.

41. Mr Tabar's evidence concerning the amount of time necessary from quarrying the marble to deliver in Hong Kong was not much at variance with Mr Rossi's. There was however one important difference. Mr Rossi had based his assumptions upon the premise that all of the 8300 square metres of marble would come from one supplier in Italy. Mr Tabar suggested that having regard to the limited time available it would have been most unwise to only place an order with one supplier. A considerable amount of time could have been saved if orders had been placed with a number of suppliers.

42. Mr Tabar insisted that Mr Rossi had assured him that he would have no difficulty in obtaining a sufficient supply of marble with the time available.

43. What does however have to be borne in mind is that it is very clear from the supporting documents that until the end of May 1988 Mr Rossi had no assurance whatever that the plaintiffs would obtain contracts for the supply of the marble. It is accordingly necessary to take cognizance of the fact that whatever knowledge Mr Rossi may have had of the Defendant's commitments the Plaintiff was not directly concerned with the matter until agreement was concluded between the Plaintiff and the Defendant at the end of May and the defendant opened the letter of credit in the Plaintiff's favour.

44. In this connection it is also significant to bear in mind the terms of the letter of credit. While it is true that it provided for delivery at the Italian port by 10th July and expired on the 20th of July it did provide for partial shipments. There was no specific written contractual requirement between the parties for shipment of stated quantities by given dates.

45. Mr Tabar was taken through the relevant documentation which dealt with communications between the parties at this time. He agreed that by the middle of June Mr Rossi had informed him of the difficulties he was encountering in obtaining sufficient quantities of Botticino Semiclassico marble.

46. According to Mr Tabar all of this was occasioning him the most extreme embarrasement. Hip Hing were pressing him very hard for firm information that marble would be arriving in sufficient quantities within the time required for the Defendants to fulfil their contractual obligations.

47. It was in this context that Mr Tabar had been prepared to extend the delivery and expiry dates specified in the letter of credit. The way he put it was that he had no alternative but to grant latitude to the Plaintiff as time was marching on and if he was unable to obtain sufficient supplies of marble he would be placed in the greatest jeopardy as the contract between the Defendant and Hip Hing contained severe sanctions for delay. It was common ground between Mr Tabar and Mr Rossi that in addition to the faxes and telexs which were exchanged there were also telephone conversations. What is not agreed was what was said during the course of these conversations.

48. It would appear that matters come to a head on August 8th. There was a sharp divergence between the parties as to what was said when these men spoke on the telephone on that day. It was agreed that Mr Rossi had said that unless further substantial extensions of time were granted he could only deliver slightly more than half of the 8500 square metres of marble. What was in disagreement was the consequences of this. According to Mr Tabar he had made it clear that Mr Rossi would be responsible for any losses which might arise as a result of the Defendant having to make up the shortfall from other sources at short notice. Mr Rossi claimed that Mr Tabar had not said anything of this nature to him. According to him Mr Tabar had willingly released him from any further obligation which may have existed between them and said that he would obtain marble locally in Hong Kong to make up a sufficient quantity to enable the contract to be completed.

49. It is important to note that the contemporary documents are much more supportive of Mr Rossi's version of what transpired. In the telex of the 9th August he states that there is no longer a requirement for him to supply all of the 8500 square metres and that the shipments would be in accordance with the advice contained in that telex. There is no telex or fax in response to this disagreeing with the statement.

50. It is however necessary to take in account the fax Mr Tabar sent on the 25th August which I have already referred to when commenting upon Mr Rossi's evidence. It is however also necesary to state that this was never followed up and I believe that the settlement of accounts on the 9th September is entirely supportive by Mr Rossi's evidence and at variance with Mr Tabar's.

51. Mr Tabar's explanation for the settlement of accounts on the 9th September was that it was only an interim settlement. In support of this he contended that the 2nd shipment of marble had only just arrived in Hong Kong at that date and this being the case it was impossible for the parties to settle accounts as the defendant had had no sufficient opportunity of examining the 2nd shipment in any detail. I believe that this explanation can only be convincing if at that time it was in Mr Tabar's contemplation that there would be problems with the 2nd shipment. Besides Mr Tabar's oral cestimony there was no evidence to support this.

52. Mr Tabar spent a considerable amount of time in the witness box elaborating in detail on all the deficiencies of the marble which had been supplied by the Plaintiff. He said that he based his knowledge on almost daily attendances at the site. He did however appear to accept that Mr Wong Ka Sum of Fairy Marble who actually installed the marble at Park View was in a better position to give detailed evidence of the problems which had arisen on the site.

53. Mr Tabar was adamant that there were serious quality problems with both the 1st and 2nd shipments of marble from the Plaintiff. He appeared to accept that the problems had been greater with the 2nd shipment than the 1st. He described at length all the deficiences said to exist. He claimed that he had sufficient knowledge and experience of the marble business to be able to state definately that the marble which had been supplied by the Plaintiff did not conform to the description of Botticino semiclassico marble. He complained about the colour of the stone and the difficulties encountered in matching the different stones together so that when it was installed in the bathrooms and dining areas at Parkview it would all appear to be of a consistent colour. He also complained about the white markings on most of the marble and the fact that much of the marble had deep veins appearing upon it. He even went so far as to describe portions of the marble as junk.

54. He said that when he became aware of the position he was faced with a very difficult problem. By that time that is late August and early September he was under very great pressure from Hip Hing to instal the marble. In the light of this he had decided to instal the marble notwithstanding its deficiences and shortcomings. He said that he had no alternative but to do this.

It soon became manifest that grave problems were encountered in relation to the marble which had been supplied. The Architect and Hip Hing had been dissatisfied with the quality of the marble and had required extensive rectification work to be undertaken. There had also been great difficulties with matching the colours of the different areas and there were unacceptable amounts of wastage of material.

55. There is however a problem in relation to this testimony. I refer to the almost total lack of any supporting documentary evidence of these complaints. Mr Tabar agreed that a procedure was laid down under the contract for formal complaints by the Architect to be in writing. He said that many of the complaints which had been made had been verbal and that as the result of his compliance with the demands which had been made the problems had been resolved. In addition to this there had been a number of written memoranda but these had been "lost". Having regard to the overall gravity of the alleged problem it is difficult to attach much credence to this evidence.

56. According to Mr Tabar Hip Hing were as a result of the poor quality of the marble refusing to make payments to him in accordance with the contract. It seems unlikely that the Defendant would not have kept a complete record of all complaints made and produced it for the purpose of this litigation if it ever existed.

57. With the exception of one complaint relating to the quality of marble installed in the Dining rooms in Tower 4 of the Complex there were no other complaints. I will be dealing separately with Hip Hing's letters of the 5th March 1990 and the 7th May 1991 which on their face appear to suggest that there were problems with the quality of the marble.

58. What is important to note in connection with these letters is that it is clear that the complaints which were being made related to marble installed in Towers 1 to 5. As will be clear later on it is most unlikely that any of the Plaintiff's marble was installed in Towers 1, 2, 3 & 5. Also it is fairly obvious that these letters were written in connection with the litigation between Hip Hing and the Defendant and that Hip Hing would at the time when both letters were written have had little or any interest in the matter in question. A further important matter is that it is evident from all of the documentation relating to the litigation between the defendant and Hip Hing that the quality of the marble installed was not a significant issue in that litigation.

59. Perhaps the most unsatisfactory aspect of Mr Tabar's evidence was the way in which he answered questions put to him in cross-examination by Mr Clayton relating to Mr Rossi's demands for payment of the moneys which were due to him.

60. I have already indicated the general tenor of this correspondence. Mr Tabar said that the reason why he did not refer to the problems he was experiencing as a result of the poor quality of the marble was that he was anxious to maintain a good business relationship with Mr Rossi. Having observed Mr Tabar in the witness box over a number of days he did not strike me as being the sort of person who would be backward in making a complaint if it was justified. Indeed my impression was to the contrary.

61. In my view Mr Tabar failed to give any plausible or convincing explanation for the existence of this correspondence or of his failure to make any reference to deficiences of quality until the December letter.

62. The main witness to give detailed evidence for the Defendants was Mr Wong Ka Sum. He described his function as being effectively the Defendant's site co ordinator at Parkview. One of the problems relating to his evidence was that he had never seen either the contract between the owners of Parkview and Hip Hing or the contract between Hip Hing and the Defendant. He agreed that he had no detailed knowledge of the specifications for the contracts.

63. Mr Wong was generally of the opinion that the marble contained in the 1st shipment from the Plaintiffs had been of a reasonable quality. His main criticisms were levelled against the quality of the marble in the 2nd shipment. He was asked if he could remember where the Plaintiff's marble had been installed. He referred to the different stages of the development and said that the 1st shipment of marble had been installed in Towers 6, 7, 14 and 15 and the 2nd shipment in Towers 1, 2, 3 and 5.

64. He was taken through the certificates issued by the Architects and the applications which had been made for payments to Hip Hing and having regard to the agreed date when the marble arrived in Hong Kong and the amount of time it would take for it to get to the site it was virtually inconceivable that the marble from the 2nd shipment could have been installed in Towers 1, 2, 3 and 5 and unlikely that the marble in the 1st shipment was used.

65. The position was complicated by several factors. One of them was the fact that the Defendant had a substantial quantity of Botticino semiclassico marble available to them which had been left over by a company called Fudo which had preceeded Hip Hing as the main contractor on the site. In addition to this Mr Tabar had requested him and a Miss Lisa Li to obtain marble from dealers in Hong Kong and some of this marble was coming on site at this time.

66. To give him due credit Mr Wong readily agreed that having regard to the passage of time where his recollection was at variance with contemporaneous documents the documents were much more likely to reflect the true position.

67. Be that as it may I have no doubt that Mr Wong had almost no accurate recollection as to which Towers the Plaintiff's marble had been installed in.

68. This finding has repercussions so far as the Defendants claim is made for the Declarations in paragraph 23 of the re-amended Defence and Counterclaim.

69. The claim for the Declaration is based upon the two letters I have referred to from Hip Hing and it is clear from these letters that the defects of quality of marble complained of relate to marble which was installed in Towers 1 to 5. On the evidence which is available I do not accept that it was the Plaintiff's marble which was the subject of the deductions made by Hip hing.

70. Mr Wong did state that the marble comprised in the 2nd shipment was of poor quality and that this led to extra work having to be undertaken when it was installed. In particular he made reference to excessive wastage, difficulties in matching colours and the necessity of doing bevelling work on account of the cracks at the edges of the tiles.

71. In particular he referred to the necessity to undertake a large amount of remedial work at the behest of the Architect.

72. Like Mr Tabar he was quite unable to provide any satisfactory explanation for the paucity or non existence of any documentary evidence to support the allegations he was making. I believe that he has greatly exaggerated the problems which existed.

73. Also I am by no means convinced that where there were problems with the marble that the marble in question had been supplied by the Plaintiff. Over and above this there was reference in the papers to "the appalling standard of workmanship" I consider that this was much more likely to have been a relevant factor.

74. A good illustration of the difficulties arising in connection with Mr Wong's evidence is the claim for additional handling and matching and inspection costs in paragraph 14(C) of the re-amended Defence and counterclaim.

75. The basis of this claim was referred to in a letter dated 28th April 1989 from Mr Wong to the Defendant. The letter was as follows :

"Dear Sirs

Re: Parkview Development

Refer our letter dated on 21st December 1988. We would like to inform you that we have to spend additional labour force for colour selection and doing chamfered edge for those materials are occured in bad condition that we mentioned before.

Also the materials supplied by your supplier are still not sufficient to finish this project due to the materials have a lot of wastage. Then we have to buy the remaining balance of materials in local market to meet the finishing schedule of the client. So the extra cost for those work mentioned above will be stated as follows:

Estimate of Additional costs

Colour Selection and marble

matching                                      HK$5.36 per sq m

Chamferring the bevel edges                HK$8.60 per sq m

Material Supplied by Travertine

4,602.75 sq.m.

(13.96 x 4,602.75)                                  $64,254.39

Material obtained in Hong Kong

3 894.43 sq m.

(13.96 x 3,894.43)                                  $54,366.24

$118,620.63

Yours faithfully

for FAIRY MARBLE CO

(Signed)

K.S. WONG"

76. The Plaintiff obtained an order for the Discovery of documentation which might support the claim which was made.

77. No documents were discovered prior to the trial. During the trial a bundle of papers was produced. On examination of these papers it was evident that they did not support any such claim. Where there was reference to payments of money being made the payments were made to Third parties not to Fairy Marble Company.

78. Even if it had been possible to prove that any payments had been made to Fairy there was no evidence whatever to satisfy me that the payments had to be made as a consequence of any default on the part of the Plaintiff. All of the credible evidence indicated that a certain amount of work would have to be undertaken chamferring bevel edges and matching colours and much if not all of this work would almost certainly have to have been done notwithstanding the fact that the marble conformed to its description in the contract between the parties.

79. At the end of the day I did not consider that Mr Wong's evidence was of much assistance to the Defendant.

80. The Defendant also called expert evidence on Botticino Semiclassico marble. They produced a report prepared by Mr Lam Yan Pui who claims to have had 10 years experience in the marble industry. I did not find his report to be of much assistance. Mr. Lam largely based his report on the photographs which were exhibited to the survey undertaken by Binnie and Partners. These photographs showed parts of the areas with Botticino semiclassico marble and the quality of the pictures was at best indeterminate. I say this partly because the model which was used in this survey was based upon one of the exhibits of marble which was in the court during the hearing and it is evident even to an inexperienced eye that the photo of the model in the survey was by no means an exact replica so far as colour was concerned with the original exhibit.

81. As I have stated earlier in this Judgment this case to a large extent depends upon the view I take regarding the credibility or otherwise of the 2 main witnesses for the respective parties Mr Rossi and Mr Tabar.

82. I formed a favourable view of Mr Rossi as a witness. He definitely gave me the impression that he was a truthful and reliable witness. In addition to this in all important respects his evidence was corroborated by the contemporaneous documents.

83. On the other hand I regret that I did not form a favourable impression of Mr Tabar as a witness. He definitely gave me the impression that he was evasive untruthful and prone to excessive exaggeration. Perhaps more important than this his version of events cannot on any sensible criteria be reconciled with the contemporaneous documents. No convincing explanations were forthcoming to justify the more glaring inconsistencies.

84. Where there are conflicts between the evidence of Mr Rossi and Mr Tabar I much prefer the evidence of the former.

85. Doing the best I can with the evidence I am satisfied that on the 8th August 1988 Mr Tabar instructed Mr Rossi not to supply any further marble over and beyond the Botticino Semiclassico marble referred to in the fax of the 9th August 1988.

86. Also I am satisfied that there was indeed a settling of accounts on the 9th September 1988 and that it was the intention of the parties that this should be the case. There can therefore be no question of any of the claims arising from the alleged short shipment or delay having any merit whatever. I dismiss them all accordingly. In coming to this conclusion I have also borne in mind the overall circumstances and in particular what must have been in Mr Rossi and Mr Tabar's minds at the time in question I believe it would have been obvious to both men what Mr Rossi could and could not achieve when the decision was made for the Plaintiff to supply some of the marble for this project.

87. I am also entirely satisfied that the Defendant's claims relating to the marble being of poor quality are without foundation.

88. In coming to this conclusion I have also borne in mind Mr Tabar's considerable delay in making a claim and the absence of any satisfactory explanation for writing the letters I have earlier referred to. Without such an explanation I find myself inevitably coming to a conclusion that the Defendant's Defence and counterclaim have been advanced for ulterior motives.

89. An important factor in this connection is the almost total lack of any documentary evidence to support the Defendant's contentions. It follows from this that all claims which are based upon the Plaintiffs marble having been defective are dismissed.

90. The result of this is that the Defendant's reamended Defence and counterclaim is dismissed and I enter Judgment in favour of the Plaintiff in the amount claimed namely US$282,055 38 plus daily interest of US$53,242 for 16 days which amounts to US$851,872 from the 13th June 1991 to the date of the handing down of this Judgment. Thereafter interest will be payable in the usual manner on a judgment debt.

91. I also make an order nisi that the Plaintiffs are to have their costs.